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In times of market volatility, conventional wisdom suggests investors should be in “safer” stocks such as utilities and income-generating assets like real estate investment trusts (REITs). However, the monster that is Link REIT (SEHK:823), an owner and operator of shopping malls, has seen its share price impacted by a double whammy of ongoing protests in Hong Kong and the likelihood that the US Federal Reserve will not lower interest rates as much as expected.
Since protests kicked off on 9 June, Link shares have shed 6.3% as fears mount that sustained social unrest could start to impact footfall at its suburban shopping malls. Meanwhile, the past week has seen Link’s trading volumes surge – with its share price coming under selling pressure – as investors weigh up the likelihood of another interest rate cut in September by the Fed.
The latest tweet from US President Donald Trump, announcing plans for a new round of tariffs on Chinese imports, offered Link investors some reprieve on Friday as (ironically) the resulting uncertainty of increased tensions could push the Fed to cut rates further this year in a bid to support growth. Among all this turbulence, the key question is; where next for Asia’s largest listed REIT?
Source: CapIQ as of 2 August 2019
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Tim Phillips doesn’t own shares in any companies mentioned.